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Corporate culture can sabotage success of chief digital officer

Digital business has created a new seat at the C-suite table: the chief digital officer. But according to research from Strategy&, a global strategy consulting team at PricewaterhouseCoopers, the role is not as popular as all the chief digital officer chatter would have you believe.

In a survey of the top 1500 companies globally, Strategy& found that only 6% have a chief data officer (CDO) or the equivalent. That said, momentum for the role is on the upswing. The authors of the report, “Adapt, disrupt, transform, disappear: The 2015 chief digital officer study,” pointed out that more than a third of digital leaders who made up that 6% were appointed just in the last year.

The report found that larger companies (defined as having more than 10,000 employees) were more apt to hire a CDO than smaller companies (those with fewer than 10,000 employees). There are two reasons for this, according to the report: One, digital leaders aren’t cheap, and the hire “may be beyond the means of many smaller firms.” Two, digital transformation for larger companies is often more complex than it is for smaller companies, requiring a leader rather than parceling out digitization efforts among existing staff.

The biggest digital hurdle is people

Shawn Banerji, managing director at Russell Reynolds Associates, an executive search firm in New York, said the job of the chief digital officer once installed — and no matter how much desired by the company — is rarely easy.  One of the biggest hurdles CDOs face in leading digital transformation is people and culture. This is especially the case at large global companies, where corporate culture is often more entrenched than at mid-sized companies. The situation will be familiar to any CIO who has undertaken a large ERP implementation, he said.

“ERP implementations usually did not fail because someone couldn’t integrate Oracle or SAP into the company’s operating backbone,” Banerji said. “It was because the users, themselves, by and large, rejected the new workflows and processes that were required.”

Resistance to change sets a CDO up for failure. “You can’t expect one individual, no matter how senior or hip or cool or smart, to come in and individually affect this kind of change and transformation,” he said. For CDOs to succeed, they need support from top executives and, as important, Banerji argued, from the people doing the actual work.

“It has to be something that is embraced at an institutional level — not just at the highest level, but something that permeates the organization, especially at the level where a lot of the work gets done, which I would describe as senior middle management,” he said.